EC410412RO
STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
GERTZ PLAZA
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
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IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO. EC410412RO
: DISTRICT RENT OFFICE
David Frankel Realty Co., Inc. DOCKET NO. 30900
TENANT: Norman and Joan
Evans
PETITIONER :
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
AND MODIFYING COMMISSIONER'S PRIOR ORDER
AND OPINION AFTER COURT REMIT
This proceeding was commenced by the filing of an objection to apartment
registration, including, among other things, an overcharge complaint, by
the tenants concerning housing accommodations known as Apartment 18C at
400 East 57th Street, New York, New York. The proceeding was processed
by the Administrator as a fair market rent appeal.
By order issued February 22, 1990, the Administrator determined the fair
market rent pursuant to the special fair market rent guidelines
promulgated by the New York City Rent Guidelines Board for use in
calculating fair market rent appeals, and directed the owner to refund
all excess rent collected to the tenants. On March 26, 1990, the owner
filed an administrative appeal of said order, in which he enclosed a
photocopy of the owner's answer to a Division notice, along with
supporting documents, which was date-stamped received by the Division on
February 16, 1990. That February 16, 1990 answer had not reached the
Administrator's file prior to issuance of the Administrator's order.
Subsequent thereto, the petitioner filed a petition in the Supreme Court
pursuant to Article 78 of the Civil Practice Law and Rules requesting
that the "deemed denial" of the petitioner's administrative appeal be
annulled. The proceeding was remitted to the DHCR for a determination
of the petitioner's administrative appeal. By order issued on July 18,
1991, the Commissioner rejected the owner's February 16, 1990 submission
as untimely and denied the petition for administrative review. A
detailed chronology of that proceeding appears in the July 18, 1991
order of the Commissioner.
The owner thereafter filed an Article 78 petition in Supreme Court,
challenging the Commissioner's order. On November 15, 1991 an order was
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signed by Justice Joan B. Lobis remitting the proceeding to the DHCR for
a new determination based on all the evidence submitted theretofore.
In accordance with the court order, the Commissioner will now consider
the owner's February 16, 1990 submission.
With its February 16, 1990 submission the owner submitted a completed
Schedule of Comparability Data (Schedule 1) for the subject line of
apartments and for the B line of apartments. This schedule indicated
that there are no other apartments in the same line as the subject
apartment which contain the same number of rooms as the subject
apartment and were rented for the first time as a stabilized apartment
between April 1, 1978 and March 31, 1983.
The owner asserted that Apartments 14B and 17B should be utilized in the
comparability study. The owner stated that the first stabilized tenant
of Apartment 14B took occupancy of that apartment pursuant to a lease
commencing April 1, 1980 and expiring March 31, 1982 at a rent of
$1025.00 monthly. The owner included the initial stabilized lease for
Apartment 14B (the Commissioner's earlier order erroneously stated that
the owner had failed to submit that lease), a copy of a DC-2 notice
addressed to the first stabilized tenant of Apartment 14B dated July 1,
1980, and a signed return receipt for certified mail postmarked July 12,
1980.
Concerning Apartment 17B, the owner stated that that apartment was
rented to an initial stabilized tenant pursuant to a lease commencing
October 1, 1979 and expiring September 30, 1981 at a rent of $812.00 per
month. The owner submitted a copy of an Office of Rent Control
Decontrol Order (Docket No. 2DPR2554) dated July 23, 1979 based on non-
primary residence, a rent ledger indicating an initial stabilized rental
of Apt. 17B pursuant to a lease commencing October 1, 1979 and expiring
September 30, 1981 at a monthly rent of $812.00 and an initial apartment
registration form (Form RR-1) and proof of service (a Post Office
Certificate of Mailing Form #PO3877 postmarked June 28, 1984) on the
tenant of Apt. 17B.
In an answer to the owner's petition for administrative review which
included the owner's February 16, 1990 submission, the tenant asserted,
among other things, that the owner cannot arbitrarily choose one
apartment in a line for comparability purposes but must submit
documentation for the entire line; and that the owner failed to submit
a DC-2 notice with proof of service for Apartment 17B. In reply to the
tenant's answer, the owner stated, among other things, that it submitted
all required information for the B and C lines of apartments. (The
owner incorrectly stated this as the B and D lines.)
The Commissioner is of the opinion that this petition should be granted.
Pursuant to Section 2522.3(e) and (f) of the Rent Stabilization Code
effective May 1, 1987, applicable to fair market rent appeals filed
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after April 1, 1984, comparability will be determined based on the
following:
(e)(1) Legal regulated rents, for which the time to file a
Fair Market Rent Appeal has expired and no Fair Market Rent
Appeal is then pending, or the Fair Market Rent Appeal has
been finally determined, charged pursuant to a lease
commencing within a four year period prior to, or a one-year
period subsequent to, the commencement date of the initial
lease for the housing accommodation involved; and
(2) at the owner's option, market rents in effect for other
comparable housing accommodations on the date of the initial
lease for the housing accommodation involved; and
(f) where the rents of the comparable housing accommodations
being considered are legal regulated rents, for which the time
to file a fair market rent appeal has expired, and such rents
are charged pursuant to a lease ending more than one year
prior to the commencement date of the initial lease for the
subject housing accommodation, such rents shall be updated by
guidelines increases for one year renewal leases, commencing
with the expiration of the initial lease for the comparable
housing accommodation to a date with 12 months prior to the
renting of the housing accommodation involved.
Pursuant to Sections 2522.3(c)(2), 2526.1(a)(2)(ii), and 2528.2(d) of
the Rent Stabilization Code, a tenant must file a challenge to the
initial apartment registration (overcharge complaint or fair market rent
appeal) which 90 days of service of the registration form on the tenant
by certified mail. Section 2528.2(d) further provides that for
registrations served prior to the effective date of that section, any
method of service permitted by the DHCR at the time of service shall be
deemed to have the same effect as service by certified mailing.
The Division's instructions for service of the initial rent registration
on the tenant by the owner provided for hand delivery of the envelope
with signed receipt, use of the Post Office "Carrier Route Pre-Sort"
Service through a bonded mailing house as evidenced by the Post Office
date-certification of the number of pieces received from the mailing
house for each building and the mailing house adressee list or regular
first class mail documented by Post Office form #P.O. 3877.
DHCR instructions further provide that the proof(s) of receipt, properly
signed and dated (by the tenant, the post office, and the mailing house,
as appropriate) will be considered adequate by the DHCR to establish the
tenant's 90 day challenge period, which will begin on the date of
receipt.
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To document the mailing of the apartment registration to the tenant of
Apartment 17B, the owner has submitted a Certificate of Mailing (Post
Office Form #P.O. 3877) which lists that apartment and its tenant and is
postmarked June 28, 1984 by the Post Office. The Commissioner finds
that the documentation conforms to DHCR service requirements and proves
mailing of the apartment registration to the tenant of Apartment 17B on
June 28, 1984.
Section 25 of the former Rent Stabilization Code provides that a fair
market rent appeal must be filed within 90 days of receipt by the tenant
of the initial legal regulated rent notice (DC-2 notice). Section 26 of
the former Code provides that such notice must be served on the tenant
by certified mail.
The Commissioner finds that the owner has adequately documented service
of the DC-2 notice on the tenant of apartment 14B by certified mail as
required by Section 26 of the former Code.
In the instant case, the owner has submitted data for the subject line
and the B line of apartments which indicated that only apartments 14B
and 17B both contained the same number of rooms as the subject apartment
and were rented to a first stabilized tenant within the required period,
four years prior to or one year after the commencement date of the
initial stabilized lease for the subject apartment. The owner
documented the initial stabilized rents for those apartments with the
initial stabilized lease and Form DC-2 for Apartment 14B, and a
decontrol order, a rent ledger, and Form RR-1 for Apartment 17B and,
having submitted adequate proof of service of those notices, documented
that those rents are no longer subject to challenge.
The Commissioner therefore finds that the comparability data submitted
by the owner is adequate to warrant the use of Apartments 14B and 17B as
comparables in determining the fair market rent for the subject
apartment. As both of these apartments were rented to initial
stabilized tenants pursuant to leases ending less than one year prior to
the commencement date of the initial lease for the subject apartment, no
updating of the comparable rents is required. Averaging these two
comparable rents results in an average comparable rent of $918.50
($1025.00 + $812.00 divided by 2 = $918.50).
The fair market rent is determined as follows: The result of the special
guideline formula, $803.52, is averaged with the average comparable rent
amount of $918.50, resulting in a fair market rent of $861.01.
Since the $980.00 per month initial rent challenged by the tenant
exceeds the $861.01 fair market rent established in this order, the
initial legal regulated rent is adjusted from $980.00 to $861.01
effective April 1, 1982, the date of commencement of the initial rent
stabilized lease.
The owner is directed to adjust the rent to the stabilized rent
consistent with this decision; to refund or fully credit against future
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rents over a period not exceeding six months from the date of receipt of
this order, any rent paid by the tenant herein in excess of the lawful
stabilized rent as set forth on the attached Rent Calculation Chart,
which is incorporated into this order, as well as any security in excess
of one month's rent pursuant to Section 2525.4 of the Rent Stabilization
Code. The total excess rent due the tenants is $8,835.12.
In the event the owner does not take appropriate action to comply within
sixty (60) days from the date of this order, the tenant may credit the
excess rent collected by the owner against the next month(s) rent until
fully offset.
The owner is directed to reflect the findings and determinations made in
this order on all future registration statements, including those for
the current year if not already filed, citing this order as the basis
for the change. Registration statements already on file, however,
should not be amended to reflect the findings and determinations made in
this order. The owner is further directed to adjust subsequent rents to
an amount no greater than that determined by this order plus any lawful
increases.
If the owner has already complied with the Rent Administrator's order
and there are arrears due to the owner as a result of the instant
determination, the tenant shall be permitted to pay off the arrears in
twenty four equal monthly installments. Should the tenant vacate after
the issuance of this order or have already vacated, said arrears shall
be payable immediately.
THEREFORE, in accordance with the Rent Stabilization Law and Code, it is
ORDERED, that this petition be, and the same hereby is, granted, and
that the Commissioner's prior order be, and the same hereby is, modified
pursuant to this order and opinion.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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